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Cintas Management Discusses Q4 2012 Results - Earnings Call Transcript

We are pleased to report record fourth quarter revenue of $1,054,000,000. In an increasingly sluggish U.S. economy, fourth quarter revenue grew 4.1% from last year's fourth quarter. Fourth quarter net income increased by 11.1% to $79 million, and earnings per diluted share were $0.60, a 22.4% increase over last year. Mike will provide more details shortly on the fourth quarter performance.

This fourth quarter concluded a very successful fiscal 2012 year for Cintas in which our revenue topped the $4 billion mark for the first time at $4,102,000,000 and our earnings per diluted share hit a record level of $2.27. Our employees, who we call partners, did a great job of executing our game plan throughout this past 12 months. Congratulations to our partners on their achievements this year.

We remain confident in our business' opportunities and our ability to execute our game plan. As such, during our fourth quarter, we purchased 3.3 million shares of Cintas stock at an aggregate cost of $129.6 million. Since these purchases were made so late in the fiscal year, they had no impact on our fourth quarter results. However, we expect it will positively increase fiscal 2013 earnings per diluted share by about $0.06. This impact is incorporated into our fiscal 2013 guidance. Our board authorized a $500 million share buyback program in October 2011, so we now have $370.4 million remaining of that authorization.

Now I would like to turn the call over to Mike for more details on the fourth quarter, after which I will provide additional comments on our fiscal 2013 guidance.

J. Michael Hansen

Thank you, Bill. As Bill mentioned, total revenue increased 4.1% from the fourth quarter of last year with total company organic growth being 4%. Total company gross margin for the fourth quarter was 42.1%, which is down from last year's fourth quarter gross margin of 42.8% mainly due to lower recycled paper prices. I will discuss these items in more detail by segment. Before doing so, please let me remind you that there are 66 workdays in our fourth quarter, which was the same as last year. Looking forward to fiscal 2013, our workdays will be as follows: 66 in the first quarter, 65 in the second quarter, 64 workdays in the third quarter and 66 in the fourth quarter. The total workdays in fiscal 2013 will be 261, which is one less than fiscal 2012. The difference occurs in the third quarter, where there were 65 workdays in fiscal 2012. The one less workday in fiscal 2013 will negatively impact fiscal 2013 total revenue growth by about 40 basis points.

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